“Small businesses, especially start-ups, face a lot of challenges in managing their finances. From keeping track of payments to invoicing and receipts, managing books of accounts to reconciling with the bank statement, the tasks have never been easy for small entrepreneurs. Banks do not understand the evolving needs of new business models. Even if they do, they are not in a position to address the issues as they sit on legacy platform built over the years. Making a change is a complex process. Such irritants, though small, offer huge opportunities for a start-up such as ours,” Anish Achuthan, Co-founder and Chief Executive of Open, a neo-banking platform for SMEs, told BusinessLine . Excerpts.

How do you help SMEs manage their finances?

We’ve built a digital platform to automate all the processes, which otherwise sit in silos. Since banking licence is next to impossible for start-ups such as ours, we decided to partner with a bank, use the bank’s services to build our platform on top of the bank’s infrastructure for customers. Our platform makes it easier to review payments, manage GST filing, and accounting.

Were SMEs convinced with this new offering?

Well, SMEs rely on lots of tools such as Tally. Post-demonetisation, the use of technology in business has only surged. So, it was not difficult for us to make them understand our concept. In fact, we have onboarded more than one lakh small businesses and more than 35,000 crore transactions have taken place on this platform. There is an evolution that is happening. We target SMEs that use bank services and tools such as Tally, QuickBook or Zoho, and with a turnover between ₹50 lakh and ₹3 crore.

Out of the 60-million MSMEs, only 3-4 million were using technology in some form or the other until two years ago. This number is on the rise. Open is currently serving over one lakh clients and processing transactions worth $5 billion in run rate annually. The platform onboards 20,000 new SMEs and start-ups every month.

What is your vision for the company?

The segment in which we operate is called neobank, which is a digital bank, offering 10-12 services by partnering with a bank. Globally, there are around 16 neobanks, focussed on SMEs and some on consumers.

Our vision is to onboard at least 10 lakh SMEs in the next 12 months.

Besides helping our customers with banking and payment, we also want to help with working capital requirement.

Open recently received a Series B funding of ₹210 crore led by Tiger Global. We plan to use the money to scale up the team, launch more products and value-added services, and expand our customer base significantly in the next 12 months

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